On June 1, 2020, when Mexico's new tax law came into effect, Amazon required sellers to register Mexican RFCS or automatically withhold 16% (VAT) of their sales on the platform and 20% (income tax) of their sales.
Therefore, it is particularly important for cross-border e-commerce enterprises to enter the Mexican market, understand RFCS and apply for registration of RFCS.
1、Mexican RFC tax code certificate
Mexican RFC tax number Format: RFC: ABC(Company name first letter 3 digits)310120(date) E60(Key 3 digits + numbers provided for SAT registration)
Registration date and deadline
Registration period: 2-3 months
Declaration period: Monthly report =12 times/year (no annual report required)
Deadline for application: next month 17th
We apply for the following services in Mexico RFC:
1. RFC tax code application
2. Provide representatives from Mexico
3. Provide address in Mexico
4. IVA declaration within 12 months
5, The Hague certification, translation, official fees!
Do all sellers need to register Mexican RFC tax number?
RFCS, short for "Registro Federal de Causantes" in Spanish, are obligated to register an RFC number if one of the following occurs:
① Warehouse in Mexico (either FBA or overseas)
② There are registered companies in Mexico
③ Mexican citizens
④ Aliens with legal residency in Mexico
This means that sellers with an FBA in Mexico or a local offshore warehouse need to register an RFC tax number;
Customers whose inventory is sold remotely from North American warehouses and mailed directly from China or the United States to buyers in Mexico do not have to register for RFCS.
2、Can the seller without RFC create FBA shipment?
Since May 2022, Amazon has strengthened the verification policy of sellers' RFC. For new sellers in Mexico site, if the seller has not obtained a valid RFC tax number or has not obtained a valid RFC tax number but has not submitted it to the seller platform for verification, the goods cannot be created.
If a seller with storage in Mexico does not provide a tax number before May 2022, Amazon will withhold both value-added and income taxes based on their monthly sales.
Since e-commerce platforms need to bear common tax responsibilities, Amazon will strictly control the authenticity and validity of Mexican RFCS and the authenticity of VAT tax declaration.
After the seller obtains a valid RFC certificate, it can fill in the [RFC Information Form] on the seller platform according to the following procedures to complete the verification.
1. In the seller's platform, go to [Settings] and then select [Account Info]
2. Locate the "Tax Information" section and click on "RFC ID"
3. Fill in the [RFC Information Form]
4. Click [Submit]
5. Click Select File to upload your CSF (Constancia de Situacion Fiscal) document
If you click "Upload Later", the registration information will remain "incomplete" until you upload the tax registration document
6. Click "Exit"
After completing the table and uploading the required files, you will see the completed status. The verification process can take up to 5
A working day. During the verification process, if information is missing or with the Mexican tax agency Servicio de
The Administracion Tributaria (SAT) database does not match your state on the RFC information table
It will be updated.
How do I check whether I am being withheld?
Where to look for VAT:
In the order details page of the Seller's Platform, the [Sales Revenue] section will show the estimated VAT for the item.
If withholding operation occurs, the amount of deduction will be shown below the sales income [Mall withholding tax], otherwise it will be left blank.
Where to look for income tax:
Amazon usually deducts the tax from your account and pays it to the Mexican government within the first week of the following month.
The amount withheld will be displayed in your Transaction list. Alternatively, you can view the amount of income tax withheld from your account by following these steps:
1. Under the Data Report TAB, click Payment.
2. Click the Deals TAB.
3. Under Transaction Type, select Other.
4. Under Time Period, select Custom Date Range.
5. Under "Settlement Period", select the first 4-8 days of the current month.
6. Under "Product Details", look for "Withholding Income Tax".
Amazon background verified my RFC tax number, why do I still withhold my sales VAT and income tax?
Amazon's withholding of income tax:
With a valid and verified RFC ID, Amazon Contribuyentes the seller's account information, Registro Federal de Contribuyentes (RFC), registration type, and verification status are reviewed weekly to determine if income tax withholding is necessary. If necessary, the withholding certificate will be uploaded to the seller's account by the first week of the following month.
RFC ID of entity or enterprise (legal person) registration: no withholding of income tax.
Individual (natural person) registered RFC ID: Starting January 1, 2021, Amazon will withhold income tax at 1% of the seller's total sales for the month.
3、Amazon's withholding of VAT:
Valid and verified RFC ids, the VAT percentage (%) withheld from the sales proceeds of each order is based on the seller's RFC ID type, as follows:
RFC ID registered by an individual (natural person) : 50%
Non-registered or invalid RFC ids: 100%
RFC ID of entity or enterprise (legal person) registration: 0%
To sum up, that is
For individuals registered with RFCS and individual seller accounts, Amazon will still withhold 1% income tax and 8% VAT (50% of the standard VAT rate).
Income tax and VAT will not be withheld for the registered RFC and enterprise seller account. But sellers still need to declare and pay VAT through offline tax agent.
4、Does applying for a Mexican Departure tax number save just 20% on income tax?
1. Enterprise Seller:
If you do not upload your Mexican Tax Registration number (RFC ID), Amazon will withhold 20% income tax and 16% VAT.
After the RFC ID is uploaded and verified, income tax and VAT will not be paid.
2. Individual Sellers:
If no RFC is uploaded, Amazon will withhold 20% income tax and 16% VAT.
After the RFC is uploaded and verified,
Starting from January 1, 2021, Amazon will pay 1% withholding income tax and 8% VAT (50% of the standard rate) on all sales for the month.
From June 1, 2020 to December 31, 2020, Amazon will withhold income tax from 0.4% to 5.41% of total sales for the month, plus VAT of 8% (50% of the standard rate).
And after registering the RFC tax number, the seller will have the right to declare normally and deduct the input tax. Usually, the invoices of Amazon logistics expenses, storage fees, advertising service fees and recommendation fees generated by customers contain VAT, and VAT can be used to deduct taxes in the later declaration, which is also a significant amount, accounting for 5%-7% of the sales.
That is, in the case of compliance, non-local Mexican sellers find a professional tax agent registered RFCS, the VAT payable is only about 9-12%.
Amazon cannot refund the amount withheld before submitting the RFC ID.
Does Amazon accept any other Mexican tax registration numbers?
Not accepted. The Mexican Tax Registration Number (RFC ID) is the only registration number accepted by Amazon for payment of Mexican VAT and income tax.